North Egypt News

City of Mt. Vernon City Council met Friday, Aug. 21.

Here is the minutes provided by the council:

The Mt. Vernon City Council called a Workshop Meeting for Friday, August 21, 2020 at 10:00 a.m. at City Hall, 1100 Main Street, Council Chamber Room, 2nd Floor, Mt. Vernon, IL.

Mayor John Lewis called the meeting to order.

Council Member Mike Young gave the Invocation.

The Pledge of Allegiance was recited.

ROLL CALL

Roll call showed present: Council Member Ray Botch, Council Member Joe Gliosci, Council Member Donte Moore, Council Member Mike Young, and Mayor John Lewis.

VISITORS/CITIZEN’S REQUESTS/ADDRESSES FROM THE AUDIENCE

No visitors spoke at the meeting.

FISCAL YEAR 2020-2021 FIRST QUARTER BUDGET REVIEW

City Manager Mary Ellen Bechtel reported on the final numbers from the Series 2020 Bonds Final Repayment Structure and Refunding plus $13 Million in New Money. Finance Director Steve Tate stated that the timing was perfect as bonds hit a historic low. The revised analysis shows:

Refunding Analysis

• Existing bonds principal & interest paid through final maturity date equals: $40,331,292 (same)

• Refunding existing bonds principal & interest paid through final maturity date equals: $36,178,271 (Previous $37,059,735)

• Total estimated interest savings by refunding: $4,153,021 (Previous $3,271,557)

• Difference between Original Estimate and Actual: $881,464

Additional Borrowings

• $600,000 to be used for the new Post Office

• Total principal & interest through maturity: $653,842: (Previous $668,271)

• Average annual payments: $65,884 (Previous $66,827)

• Difference between Original Estimate and Actual: $14,429

• $12,400,000 to be used for road and other capital projects

• Total principal & interest through maturity: $15,867,896 (Previous $16,552,782)

• Average annual payments: $793,395 (Previous $827,639)

• Difference between Original Estimate and Actual: $684,886

Additional Borrowings Summary

• Total new money: $13,000,000

• Total principal & interest through maturity: $15,867,896 (Previous $17,221,053)

• Interest only on new money: $2,867,896 (Previous $4,221,053)

• Difference between Original Estimate and Actual Interest: $1,353,157

Refunding and New Money Summary

• $36,130,000 Par amount, 1 Bond issue

• Actual Rate: 1.90% (Previous 2.06% - 2.10%)

• Total principal & interest through final maturity: $52,700,008 (Previous $54,280,788)

• Average annual payments for the first 12 years: $3,620,643 (Previous $3,729,566)

• Average annual payments for the last 8 years: $826,513 (Previous $860,788)

• Difference between Original Estimate and Actual Interest: $1,580,780

Council Member Ray Botch summarized that the City will be paying around $400,000 more per year for 12 years for the additional $12 million. Tate stated that the interest savings is more than enough to cover the interest on the new money.

City Manager Mary Ellen Bechtel explained the budget reports will show the first three months from May 1 to July 31, 2020. The budget figures reflect the affect of the Covid-19 Virus. Revenues came in under what was anticipated due to closures of businesses, the downturn in the Tourism and Hotel industry, and video gaming revenues. She feels that the loss will be more than anticipated, but feels that it will be manageable.

Finance Director Merle Hollmann distributed the budget summary chart for the General Corporate Fund, Public Utilities Water Fund, and the Public Utilities Sewer Fund.

City of Mt. Vernon, Illinois, Three Month Budget Review, As of July 31, 2020
Description	General Corporate Fund	Comments	Public Utilities Water	Comments	Public Utilities Sewer	Comments
Operating Cash Balance @ 4/30/2020	$5,082,208		NOT AVAIL		NOT AVAIL
Operating Cash Balance @ 7/31/2020	$4,654,633		NOT AVAIL		NOT AVAIL
Operating Working Fund Balance @ 4/30/2020	$5,494,697		NOT AVAIL		NOT AVAIL
Operating Working Fund Balance @ 7/31/2020	$5,306,224		NOT AVAIL		NOT AVAIL
Actual Revenues as % of Budget	22.3%	Should be 25% ($404K Over)	26.3%	Should be 25% ($56K Over)	23.6%	Should be 25% ($42K Under)
Actual Expenditures as % of Budget	23.9%	Should be 25% ($168K Under)	24.5%	Should be 25% ($17K Under)	24.9%	Should be 25% ($2K Under)
Originally Budgeted Operating Surplus FY 2020-2021	$133,560		$332,451		$(443,030)
Actual Operating Surplus (Deficit) after 3 months	$(188,472)		$165,006		$(139,920)

Merle Hollmann explained that the numbers do not include any capital items. It represents unrestricted fund balances. The General Corporate Operating Cash on April 30, 2020 was $5,082,208 and on July 31, 2020 was $4,654,633. He feels that the City is in good shape on its cash position and Operating Working Fund Balance. He feels that losing $188,000 is not a trend, but it is anyone’s guess.

In the Water and Sewer Fund, Hollmann explained that the final cash numbers were not available. This information will be supplied later. In Water, revenues are running higher than budgeted. In Sewer, the revenues did not come in as well as projected. The revenues came in 42% lower than estimated, due to Continental Tire’s modifications to their sewer system and their shutdown.

Hollmann presented a chart showing the five-year projections. Revenues are estimated in hopes that it will pick up again.

CITY OF MT. VERNON, IL GENERAL CORPORATE FUND WORKING FUND BALANCE PROJECTIONS 08/20/2020

	Year Ending	Year Ending	Year Ending	Year Ending	Year Ending
	4/30/2021	4/30/2022	4/30/2023	4/30/2024	4/30/2025
Working Fund Balance at Beginning of Year	5,494,697	5,118,000	5,387,921	5,234,143	4,644,828
Estimated Revenues	14,272,100	15,593,778	15,593,778	15,593,778	15,593,778
Estimated Expenses	(14,648,797)	(15,323,857)	(15,747,556)	(16,183,094)	(16,641,769)
Est. Operating Working Fund Balance at End of Year	5,118,000	5,387,921	5,234,143	4,644,828	3,596,837
Estimated Months of Operating Expense	4.2	4.2	4.0	3.4	2.6

Revenue Assumptions

1. Assuming a 1.0% decrease in 2020-21 Sales and Home Rule Tax from 2019-20, plus COVID negative impact: and 0% increase last 4 years

2. Assuming a 2.1% decrease in 2020-21 State Income Tax from 2019-20, plus COVID negative impact: and 0% increase last 4 years

3. Assuming the negative impact of COVID will be as budgeted for 2020-21 and there will be no negative impact after that

4. Assuming 10% reduction in State Income Tax by State will continue indefinitely

5. Assuming all other revenue will remain constant

6. Assuming the ADDITIONAL effect of COVID for FYE 4/30/2021 will result in a loss of $377,000, which is twice the loss for the first quarter

Expenditure Assumptions

1. Assuming staffing levels budgeted in 2020-21 will continue through 4/30/2025

2. Assuming a 2.77% increase each year in wages (union contracts are thru 4/30/2022)

3. Assuming 4% increase each year in Self-funded Health Insurance

4. Assuming 4% increase each year in Plan F Health Insurance

5. Assuming 3% increase each year in Property Casualty Insurance

6. Assuming 5% increase each year in Work Comp Insurance

7. Assuming no reimbursements will be received from MFT for Public Works labor and equipment

8. Assuming that we will continue to fund JCDC at $100,000 each year

9. Assuming that we will continue to fund DMDC at $77,000 each year

10. Assuming 2% increase each year in all other expenses

11. Assuming no transfer for Capital Items

Merle Hollmann presented a worksheet showing the General Corporate Fund 1% State Sales Tax Comparison of Current Year Actual to Budget and Prior Actual. A 30% decrease was budgeted due to the virus; however, State Sales Tax in January was only down 17.0% and in February it was down 5.4%.

General Corporate Fund 1% State Sales Tax Comparison of Current Year Actual to Budget and Prior Actual
LIABILITY MONTH	MONTH RECEIVED	FY 2020-2021 Actual	FY 2020-2021 Budget	FY 2020-2021 Actual	FY 2020-2021 Increase (Decrease) from FY2019-2020
APRIL	JULY	$398,241.88	$349,360.00	$480,044.36	-17.0%	(+13.3% Last Year)
MAY	AUGUST	$465,608.45	$453,939.00	$492,435.38	-5.4%	(+0.9% Last Year)
JUNE	SEPTEMBER		$468,618.00	$484,239.14		(+0.2% Last Year)
JULY	OCTOBER		$468,276.00	$483,901.73		(+0.00% Last Year)
AUGUST	NOVEMBER		$470,670.00	$486,259.55		(+2.2% Last Year)
SEPTEMBER	DECEMBER		$476,944.00	$469,784.65		(+4.2% Last Year)
OCTOBER	JANUARY		$482,176.00	$474,938.88		(+5.4% Last Year)
NOVEMBER	FEBRUARY		$464,699.00	$457,723.44		(-3.7% Last Year)
DECEMBER	MARCH		$576,368.00	$567,716.46		(+0.7% Last Year)
JANUARY	APRIL		$401,085.00	$395,064.74		(+0.2% Last Year)
FEBRUARY	MAY		$415,489.00	$409,252.39		(-2.0% Last Year)
MARCH	JUNE		$451,777.00	$444,996.20		(-11.1% Last Year)
ANNUAL TOTALS			$5,479,400.00	$5,646,356.92
YEAR-TO-DATE COMPARISON		$863,850.33	$803,299.00	$972,479.74
		A/C 01-10120-0000
INCREASE (DECREASE) TO BUDGET AND PRIOR YEAR ACTUAL			$60,551.33	($108,629.41)
PERCENT INCREASE (DECREASE)			7.5%	-11.2%

Merle Hollmann presented a worksheet showing a Ten-Year Comparison for the 1% Sales Tax. This is the largest General Corporate revenue source.

CITY OF MT. VERNON, IL, MULTI-YEAR COMPARISON OF 1% SALES TAX
LIABILITY MONTH	MONTH RECEIVED	FY 2011-2012	FY 2012-2013	FY 2013-2014	FY 2014-2015	FY 2015-2016	FY 2016-2017	FY 2017-2018	FY 2018-2019	FY 2019-2020	FY 2020-2021	MONTHLY % COMPARISON OF MOST RECENT YR TO PREVIOUS YEAR
APRIL	JULY	$438,054.71	$413,345.85	$417,313.89	$446,544.55	$453,501.72	$432,693.61	$426,860.22	$423,619.59	$480,044.36	$398,241.88	-17.0%
MAY	AUGUST	$425,073.52	$462,490.66	$451,599.76	$462,605.32	$464,125.16	$438,854.30	$440,901.99	$488,038.82	$492,435.38	$465,608.45	-5.4%
JUNE	SEPTEMBER	$471,145.49	$450,682.91	$449,115.95	$471,678.09	$481,928.07	$469,207.40	$453,841.19	$483,459.35	$484,239.14	$0.00
JULY	OCTOBER	$475,730.14	$431,115.53	$439,482.29	$468,015.09	$467,011.54	$437,607.36	$428,080.80	$483,701.38	$483,901.73	$0.00
AUGUST	NOVEMBER	$440,940.37	$431,643.75	$427,230.95	$463,591.46	$457,652.17	$440,577.07	$432,021.45	$475,659.74	$486,259.55	$0.00
SEPTEMBER	DECEMBER	$430,482.03	$424,995.71	$423,086.66	$455,783.48	$436,302.03	$430,567.86	$441,890.73	$451,061.33	$469,784.65	$0.00
OCTOBER	JANUARY	$423,053.79	$403,469.31	$411,730.30	$439,598.77	$443,213.70	$426,192.88	$422,557.78	$450,477.21	$474,938.88	$0.00
NOVEMBER	FEBRUARY	$482,427.64	$434,126.45	$429,370.49	$449,715.77	$438,230.23	$435,201.44	$423,276.80	$475,148.10	$457,723.44	$0.00
DECEMBER	MARCH	$578,423.02	$527,102.34	$516,248.25	$554,323.37	$542,572.85	$531,174.43	$517,811.46	$563,550.54	$567,716.46	$0.00
JANUARY	APRIL	$402,637.47	$393,061.21	$376,020.98	$413,605.65	$391,898.84	$370,949.60	$407,683.39	$394,325.33	$395,064.74	$0.00
FEBRUARY	MAY	$432,826.88	$391,809.94	$409,135.29	$402,685.75	$403,617.21	$378,441.64	$414,504.60	$417,493.64	$409,252.39	$0.00
MARCH	JUNE	$486,526.94	$431,162.08	$460,339.39	$468,445.96	$449,141.99	$451,925.75	$478,201.07	$500,594.61	$444,996.20	$0.00
ANNUAL TOTALS		$5,487,322.00	$5,195,005.74	$5,210,674.20	$5,496,593.26	$5,429,195.51	$5,243,393.34	$5,287,631.48	$5,607,129.64	$5,646,356.92	$863,850.33
% INCR/(DECR) OVER PREVIOUS YEAR		6.9%	-5.3%	0.3%	5.5%	-1.2%	-3.4%	0.8%	6.0%	.07%
Year-to-date Amounts										$972,479.74	$863,850.33
% INCREASE/(DECREASE) OVER PREVIOUS YEAR-TO-DATE											-11.2%
% INCREASE/(DECREASE) OVER CURRENT YEAR-TO-DATE Budget											7.5%
TOTAL BUDGET FOR CURRENT YEAR											$5,479,400.00

Merle Hollmann presented a worksheet showing the 1% Home Rule Sales Tax Comparison of Current Year Actual to Budget and Prior Actual.

Merle Hollmann presented a worksheet showing the State Income Tax Comparison of Current Year Actual to Budget and Prior Actual.

City Manager Mary Ellen Bechtel presented the worksheet showing the five-year plan for capital items. Capital items are not included in the General Corporate Fund. She explained that the amounts will be fluid and it may be changed over time due to the cancellation of projects. Bechtel stated that she feels that the City can go forward with the 2021 budgeted Capital Improvement items and stay on track. Discussion was held about the various capital projects. Council spoke on completing the current demolition projects next year.

VISITORS/CITIZEN’S REQUESTS/ADDRESSES FROM THE AUDIENCE

No visitors spoke at the meeting.

EXECUTIVE SESSION

No Executive Session was held.

ADJOURNMENT

Council Member Mike Young motioned to adjourn. Seconded by Council Member Donte Moore. Yeas: Botch, Gliosci, Moore, Young, and Lewis.

The meeting was adjourned at 11:00 a.m.

http://www.mtvernon.com/wp-content/uploads/2016/10/08-21-2020-1st-Quarter-Budget-Review.pdf